Microsoft turning to Yammer to beef up social tools, reports say

<i>Bloomberg</i> reports that Microsoft is willing to may more than $1B for the enterprise social collaboration company

Microsoft in serious discussions to buy Yammer, an enterprise social collaboration company, according to reports.

Citing unnamed sources, Bloomberg Thursday reported that Microsoft may be willing to pay more than $1 billion for Yammer. An agreement could be reached as soon as tomorrow, the report said.

Acquiring Yammer would significantly boost Microsoft's place in the enterprise social software business, analysts said..

To date, Microsoft has positioned its SharePoint Web application platform as a social collaboration tool, they added.

"Regardless of what Microsoft might do with Yammer, assuming the rumors are true, the company will immediately make up a great deal of lost time relative to its rivals, which have been in the market with much more mature enterprise social networking capabilities," said Brad Shimmin, an analyst at CurrentAnalysis.

Enterprise social collaboration vendors include Jive Software, Novell and Cisco Systems.

Yammer, founded in 2008, is also significant player, claiming that its software is used by some 200,000 companies worldwide, including more than 80% of Fortune 500 companies. Users include Deloitte, Ford and Nationwide, the company said.

While Shimmin said that the addition of Yammer's tools would beef up Microsoft's social networking portfolio, he wouldn't expect such an acquisition to mean the end of SharePoint as an enterprise collaboration tool.

"I don't think the addition of Yammer will necessitate a move away from SharePoint," he added.

"If anything, I think the addition of Yammer to the company's portfolio will allow Microsoft to better position SharePoint according to its historical strength, namely enterprise content management," he added.

The addition of Yammer could dramatically boost Office 365, Microsoft's cloud offering, in its competition with arch rival Google's Google Apps product, Shimmin said.

Both Microsoft and Yammer declined to comment on the report.

Sharon Gaudin covers the Internet and Web 2.0, emerging technologies, and desktop and laptop chips for Computerworld. Follow Sharon on Twitter at @sgaudin, or subscribe to Sharon's RSS feed . Her e-mail address is sgaudin@computerworld.com.

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